Horizon Technology Finance and Monroe Capital Corp Announce Shareholder Approvals for Merger and Asset Sale

Key Points

• Shareholders of both Horizon Technology Finance Corporation (HRZN) and Monroe Capital Corporation (MRCC) have overwhelmingly approved the planned merger and related asset sale.
• More than 83% of HRZN shareholders and over 88% of MRCC shareholders voted in favor of the proposals.
• Prior to the merger, Monroe Capital Income Plus Corporation (MCIP) will acquire substantially all of MRCC’s assets for cash at fair value.
• MRCC shareholders will receive a significant pre-merger cash distribution, estimated at \$0.75 per share, contingent on deal completion.
• HRZN board intends to supplement post-merger dividends with \$27.6 million in undistributed taxable earnings, subject to certain conditions.
• Exchange ratio for MRCC to HRZN shares will be based on net asset values determined shortly before closing.
• HTFM, the external manager, will waive up to \$4 million in management and incentive fees over the first year post-merger.
• The deal is expected to close within 30 days, subject to customary closing conditions.

Detailed Report

FARMINGTON, CT, CHICAGO, IL, March 16, 2026 – Horizon Technology Finance Corporation (NASDAQ: HRZN) and Monroe Capital Corporation (NASDAQ: MRCC) have jointly announced the successful approval by their shareholders for the proposed merger and related asset sale.

At special meetings held on March 13, 2026, HRZN’s shareholders approved the issuance of HRZN common stock to MRCC shareholders in connection with the merger, with over 83% of votes in favor. MRCC shareholders also gave strong support, with over 88% approving both the merger and the sale of substantially all MRCC assets to Monroe Capital Income Plus Corporation (MCIP) for cash at fair value.

Transaction Structure and Timeline

• Asset Sale: Before the merger takes effect, MCIP will purchase nearly all of MRCC’s assets at their fair value for cash. This transaction is set to unlock significant value for MRCC shareholders and streamline the path to the merger.
• Merger Completion: After the asset sale, MRCC will merge with and into HRZN, which will remain the surviving public entity, managed by Horizon Technology Finance Management LLC (HTFM), and continue trading under the HRZN ticker on NASDAQ.
• The closing of both the asset sale and the merger is subject to customary conditions, with both companies expecting completion within the next 30 days.

Shareholder Distributions and Exchange Ratio

• Pre-Merger Cash Distribution: MRCC will make a one-time pre-merger cash distribution totaling approximately \$15.9 million (about \$0.75 per MRCC share) to MRCC shareholders of record prior to the closing. This includes both the final distribution of undistributed taxable earnings (to preserve MRCC’s RIC tax status) and a supplemental distribution.
  Note: This payout is contingent on the successful closing of the merger and asset sale. The precise amount will be determined at closing, and the dividend reinvestment plan will not apply; all shareholders will receive cash.
• HRZN Supplemental Distributions: Following the merger, HRZN aims to supplement its regular monthly dividends with \$27.6 million in accumulated taxable earnings over the two quarters after closing, subject to the board’s approval and compliance with regulatory and financial covenants.
• Share Exchange Ratio: MRCC shareholders will receive newly issued HRZN shares for each MRCC share they own, based on the relative net asset values of both companies as determined shortly before closing.

Fee Waivers and Cost Synergies

• Management Fee Waivers: HTFM has agreed to waive up to \$4 million in base management and incentive fees over the four full fiscal quarters following the merger (capped at \$1 million per quarter), enhancing post-merger cost efficiency and improving potential shareholder returns.
• Expected Synergies: Company leaders highlighted that the combined entity will benefit from increased scale, enhanced earnings potential, and expanded capacity to support high-growth, innovative companies, especially in the venture lending market.

Strategic and Market Impact

• Monroe Capital AUM: The combined platform will be supported by Monroe Capital, which manages around \$24 billion in assets, providing a solid foundation for future growth.
• Growth and Value Creation: Leaders from both HRZN and MRCC emphasized the merger’s potential for meaningful synergies, cost efficiencies, and sustainable, risk-adjusted returns. The deal is expected to accelerate HRZN’s growth and reinforce its position as a leading venture finance partner.

Forward-Looking Statements and Caution

The announcement included standard forward-looking statements regarding the timing and benefits of the merger and asset sale, expected distributions, and future performance. The companies caution that actual results could differ materially depending on a variety of risks and uncertainties, including regulatory approvals, market conditions, and successful integration of the businesses.

Investor Considerations

• The merger and asset sale represent significant, potentially price-sensitive events for both HRZN and MRCC shareholders.
• The special cash distribution to MRCC holders, the post-merger supplemental dividends for HRZN holders, and the management fee waivers are all notable value drivers that could influence share prices.
• The exchange ratio based on net asset values, and the fact that the closing is expected within 30 days, are key considerations for investors looking to position their portfolios.

Contact Information

• Horizon Technology Finance Corporation Investor Relations: ICR Garrett Edson, [email protected], (646) 200-8885
• Media Relations: ICR Chris Gillick, [email protected], (646) 677-1819
• Monroe Capital Corporation Investor Relations: Mick Solimene, CFO & CIO, [email protected], (312) 598-8401
• Media Relations: Daniel Abramson, [email protected], (857) 305-8441

Disclaimer: The above is a summary of a shareholder approval and merger announcement from Horizon Technology Finance Corporation and Monroe Capital Corporation. This article contains forward-looking statements that involve significant risks and uncertainties. Actual results may differ materially from those stated herein. Investors are advised to review all relevant filings with the U.S. Securities and Exchange Commission and to seek their own professional advice before making investment decisions. This article does not constitute an offer to sell or a solicitation of an offer to buy any securities.

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